South America-China Trade Surge: ONE's Insights Reveal Key Drivers

The container shipping volume between South America and China is experiencing significant growth, transforming historical trade patterns. In less than two decades, exports from South America to China have surged from approximately 200,000 TEUs in 2005 to over 1 million TEUs in 2024, while imports have climbed from under 500,000 TEUs to more than 3 million TEUs in the same period. This deepening relationship, largely driven by a significant increase in foreign direct investment (FDI) and evolving economic needs, has pushed the total trade volume to nearly 4.5 million TEUs. South America's trade relationships continue to diversify, with China becoming an increasingly important partner. Understanding the core factors behind this expansion is crucial for businesses looking to navigate and capitalize on the opportunities within this dynamic trade corridor.

 Cargo Volume by Container Ships between South America and China

Source: S&P Global Market Intelligence

Insight 1:
Why has Chinese investment shifted from resources to high-value manufacturing?

China's FDI in South America continues to expand across multiple sectors. While energy, metals, and mining remain significant, investment is diversifying into manufacturing and technology sectors, including automotive production, electronics assembly, and renewable energy projects. This diversification reflects complementary economic strengths: South America's resource assets and growing industrial capabilities paired with advanced manufacturing expertise and capital.

This investment shift increases the need for sophisticated supply chain solutions beyond simple port-to-port transport, heightening the demand for intermodal solutions to connect inland manufacturing sites with coastal ports for the complex flow of components and finished goods.

 China’s Foreign Direct Investment (FDI) in Major South American Countries by Industry

Source: Red ALC-China

Insight 2:
How is Brazil navigating its trade imbalance with China?

As the region’s largest economy and primary destination for Chinese capital, Brazil’s trade relationship with China offers the most critical case study for the wider South America-China trade corridor. Brazil receives the largest share of China’s FDI, accounting for 34% in the region from 2020 to 2023. Brazil's robust export of agricultural products and raw materials has positioned it as one of the few nations with a significant trade surplus with China. However, this surplus masks a structural challenge due to the difference in the value of goods traded. To counter this, Brazil has implemented new industrial policies aimed at boosting domestic manufacturing and technological self-sufficiency, creating a more balanced and mutually beneficial trade relationship. From a logistical standpoint, this trade imbalance poses a classic challenge as it can lead to an excess of empty import containers in Brazil, requiring efficient network management to reposition equipment and maintain service fluidity.

 Cargo Volume from China to Brazil by Container Ships

Source: S&P Global Market Intelligence

Insight 3:
What does the rise of Chinese automotive brands in Brazil mean for logistics?

The Brazilian automotive market is undergoing a significant transformation, with new market entrants, particularly in the electric vehicle (EV) sector, rapidly gaining market share. These new entrants have not only captured consumer interest with competitive pricing and technology but are also investing heavily in local production facilities. This influx is reshaping the competitive landscape and accelerating the adoption of EVs in the region. The rise of automotive brands in Brazil calls for the need for experienced Special Cargo services as shipping finished vehicles, especially EVs with their unique battery requirements, demands specialized handling.

 Market Share of Electric Vehicle Sales in Brazil by Country of
Manufacturer

Source: JETRO

Your Number ONE Shipping Partner for Growth in a New Trade Era

The South America-China trade corridor is on a clear upward trajectory. Navigating this complex and rapidly expanding market presents the challenge of finding a shipping partner with foresight, reach, and a commitment to customer growth. To meet this demand, Ocean Network Express (ONE) is proactively expanding its transport solutions, including the recent launch of the East Coast South America Express 3 (SX3) service. As Your Number ONE Shipping Partner, Ocean Network Express is dedicated to delivering the exceptional service and efficiency your business needs to accelerate its growth in this vital corridor.

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Data Sources: Insights and data presented in this article are based on information from leading global organizations, including S&P Global Market Intelligence, The World Bank, the International Monetary Fund (IMF), the United Nations Development Programme (UNDP), the Japan External Trade Organization (JETRO), and other publicly available sources.